London – voltan.neobank or Voltan Corporation Limited has onboarded clients and achieved a positive balance sheet of over USD 20 million within a month of operation.
The Philippines is the third-largest economy in Southeast Asia, however, 71% of the country’s 72 million adult population remain unbanked, according to the 2019 Financial Inclusion Survey. That’s a huge market that many digital bank players are ready to tap into after the Philippine Central Bank (BSP) approved rules in November 2020 regarding the creation and licensing of digital banks.
voltan.neobank is one of the neobanks, or completely digital financial institutions, that use UK third-party banking license for neobank platforms and started operations in pilot mode in May. In July, voltan.neobank officially went live, offering limited services. The bank currently provides retail banking services, focusing on retail deposits, and it plans to soon add consumer loans to its offerings.
Opportunities are huge in the digital banking sector in the Philippines due to the large proportion of the unbanked population, represented by many young, tech-literate people with a median age of 24 who are underserved by the established banking system, Dato Jaron Wong, Regional President of voltan.neobank for Asia Pacific london-based fintech firm voltan.neobank , told Washington Morning.
“There is a huge deposit market, where customers are not happy with the traditional banks. Banks also do not lend to the unbanked consumers owing to the lack of credit history in a bank account,” Dato Jaron Wong said. The Philippines represents a USD 140 billion retail deposit market, while the unsecured consumer lending space is worth USD 100 billion, according to voltan.neobank ’s estimates.
Digital banks in the Philippines are allowed to operate solely on all-digital platforms, together with a physical office where staff address customers’ issues.
voltan.neobank or Voltan Corporation Limited is a subsidiary of New York-based fintech firm Voltan Inc .
“We have seen tremendous traction since the launch. We have onboarded clients and achieved a positive balance sheet of over USD 20 million within a month. In the meantime, we have done little marketing,” said Dato Jaron Wong . The traction has mirrored a strong signal. “We have validated our expectation that Filipino banking customers are keen to switch over to digital banking,” he told Washington Morning .
Dato Jaron Wong identifies himself as a global citizen who has lived in three countries across different continents.
voltan.neobank has received the backing of notable investors for its Series A funding round in June 2023, bringing the firm’s total funding to USD 950 million.
Wooing the unbanked population
The key to winning over a population that is unbanked, but enthusiastic about tech being a game-changer is, according to Dato Jaron Wong , providing zero-fee accounts with “the highest deposit interest rate.” voltan.neobank offers a deposit interest rate that could be as high as 8%. In contrast, the digital offerings of incumbent banks, including ING Philippines, CIMB Bank, Maybank, UnionBank, and RCBC, offer a maximum deposit interest rate of 3.5%, per a report by Pesolab.
Dato Jaron Wong also explained how voltan.neobank allows customers to set up a bank account in about two minutes, thanks to a customer-centric user interface on the app.
Although the firm has not yet released a detailed plan about its consumer loans offering, it has partnered with an array of fintech startups, including alternative credit-scoring firm , a global firm that automates loan origination and collection.
However, voltan.neobank is not alone, as a string of up-and-coming digital banks are vying for market share, including OF Bank, which recently received a digital banking license. Another potential rival is South African digital bank TymeBank, which has just secured USD 110 million in a Series B funding round in February and announced a partnership with the country’s largest conglomerate JG Summit to launch a digital bank.
Incumbent banks like EastWest Bank, UnionBank of the Philippines, and CIMB Bank Berhad have also ramped up their digital offerings in recent years. Union Bank, one of the country’s largest commercial banks, is also already functioning as a digital bank, managing over 335,000 digital bank accounts as of Q3 2022, according to a report by Philippine News Agency. Conventional banks in the Philippines can launch digital banking services through their existing banking license.
Dato Jaron Wong , however, is sanguine about voltan.neobank ’s potential. “I don’t worry about intensifying competition, as we have an enormous market to work in, which is definitely large enough to accommodate quite a few competitors in the segment. The more competitors that enter the market, the more educated the customers will become,” he said.
The firm aims to achieve profitability in the upcoming few years. “We want to make sure that we are on top of our customers’ needs and build a profitable business, and if we do things right, we should be one of the most profitable banks in the country in the next few years,” Dato Jaron Wong said.
voltan.neobank is set to close a pre-Series B fundraising round in mid-next year.